Consumer protections are critical as the federal government works through the next phase of advice reforms, Financial Services Minister Daniel Mulino says.

Plans for a new class of advisers who provide simple guidance are among the major changes expected under the Delivering Better Financial Outcomes package.

“Financial advice is very important for people,” Dr Mulino said at a lunch event last week organised by Financial Advice Association Australia. 

“We know this has been an area of policy reform over quite some number of years … There are some consequences from some of the reforms which have probably led to there being less financial advice provided in some context, and that’s something I think we need to acknowledge and be aware of.”

The need for the new category of advisers “reflects the fact there is a cohort of people out there at the moment where the current system provides arguably too little flexibility when it comes to them accessing advice, even if that advice is very basic, even if it’s guidance around them being in a very suboptimal situation, moving to … a more optimal situation.

“Having said that, there need to be guard rails in any such situation if we go down that path.” 

Dr Mulino says the next phase of reforms is a “real priority” for the Labor government’s second term.

“I think there’s a real opportunity to see positive gains here in terms of people accessing advice and guidance that is more fit for purpose … I would also say there’s a lot of work going on between stakeholders, which is very positive, and that’s between stakeholders who haven’t ordinarily always come from the same perspective on this.

“But it’s an area where I think there’s a broad acknowledgement that there’s an opportunity here to move the system forward.” 

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